The rupee posted gains against the dollar during the shortened week ended on January 10, 2009. Trading sessions shortened due to Ashura holidays. On the interbank market, the rupee went up with the gain of 13 paisa against dollar for buying and selling at Rs 79.02 and Rs 79.07.
On the open market, the rupee firmly held its current levels in terms of the US currency for buying and selling at 79.00 and 79.50. The rupee appreciated versus the euro, gaining 1.60 for buying at Rs 106.70 and it also gained 80 paisa for selling at Rs 107.70.
General trend in the money market was firm as the local currency was able to stand with its counterpart. One factor was very much obvious and that was stability of the rupee as it maintained a firm posture against the dollar despite recent tensions between India and Pakistan.
Demand for dollars was up and it also came under observation that despite this factor, the foreign exchange reserves position was firm. This was a positive development on the economic side.
INTER-BANK MARKET: On Monday, the rupee did not move to any side in relation to dollar for buying and selling at 79.15 and 79.20.
On Tuesday, the rupee inched up with slight gain against the dollar, gaining five paisa for buying and selling at 79.10 and 79.15.
On Friday, the rupee expanded its winning ground against the dollar, gaining eight paisa for buying and selling at 79.02 and 79.07. On Saturday, the rupee maintained its overnight levels versus the greenback for buying and selling.
OVERSEAS OUTLOOK FOR MAJOR CURRENCIES: In the first Asian trade, the dollar held firm near a three-week high against the yen as risk appetite picked up after Tokyo shares followed Wall Street higher on hopes for a recovery in the US economy later in the year.
Amid second session of the Asian trade, the dollar advanced to a three-week high against the euro, supported by growing expectations that the interest rate gap between the United States and the euro zone will narrow further.
On Wednesday, the dollar fell broadly, reversing sharp gains against the euro earlier in the week as concerns over the US economy and expectations for continued low US interest rates overrode earlier optimism.
But the euro remained vulnerable as data showed a rapidly weakening economy and easing inflation, which raised prospects for the European Central Bank to cut rates again next week.
On Thursday, the dollar rose against the euro, recovering some ground made after steep US job losses in the private sector, as some traders thought the greenback's slide the previous day was too sharp.
The dollar's rebound was helped by its gains versus the Australian dollar after a shocking slump in home building approvals reinforced the case for further cuts in interest rates for the country to avoid recession.
During the final session in Asia, the dollar edged down against the yen on caution ahead of US employment data that is expected to be bleak, though it held firm versus the euro to trim losses made the previous day. In the NY market, the US dollar rose, posting its best weekly gain in two months against the euro, after a government report showed job losses in December were slightly lower than expected.
According to the forex outlook, the dollar heads into the new week with the wind at its back and could drift even higher should another reduction in euro zone interest rates undermine demand for the euro.
OPEN MARKET RATES: On January 5, the rupee held its week-end levels against the dollar for buying and selling at 79.00 and 79.50.
The rupee showed further gain in terms of the euro, gaining 15 paisa for buying at Rs 107.90 and it also rose by 50 paisa for selling at Rs 108.50.
On January 6, the rupee firmly held its overnight levels against the dollar for buying and selling at 79.00 and 79.50.
The rupee improved further versus the euro, rising Rs 1.40 for buying at Rs 106.50 and it also rose by Rs 1.50 for selling at Rs 107.00.
On January 9, the rupee maintained its pre-holidays levels against the dollar for buying and selling at 79.00 and 79.50. However, the rupee failed to hold firmness against the euro, falling 20 paisa for buying at Rs 106.70 and it also dropped by Re.one for selling at Rs 108.00.
On January 10, the rupee almost maintained its levels against the dollar for buying and selling at 79.00 and 79.50. The rupee firmly held its overnight levels against the euro for buying at Rs 106.70, and gained 30 paisa for selling at Rs 107.70.